Problems a
nd Prospects
of
Micr
o, Small & Medium
Enterprises
(MSME
’s) i
n
India
Abstract:
The Micro,
Small and Medium Enterprises (MSMEs) play a
vital
role in the economic and social
development of the country, often acting as a nursery of entrepreneurship and innovation. They also play a
key role in the development of the economy with their effective, ef
ficient, flexible and innovative
entrepreneurial spirit. The MSME sector contributes significantly to the country’s manufacturing output,
employment and exports and is credited with generating the highest employment growth as well as accounting
for a major
share of industrial production and exports. MSMEs have been globally considered as an engine of
economic growth and as key instruments for promoting equitable development. The MSME sector in India is
highly heterogeneous in terms of the size of the enterp
rises, variety of products, services and levels of
technology. The sector not only plays a critical role in providing employment opportunities at comparatively
lower capital cost than large industries but also helps in industrialization of rural and backwa
rd areas,
reducing regional imbalances and assuring more equitable distribution of national income and wealth.
MSMEs complement large industries. Micro, Small and Medium Enterprises (MSME) contribute nearly 22
percent of the country’s GDP, 45 percent of th
e manufacturing output and 40 percent of the exports. They
provide the largest share of employment after agriculture. They are widely dispersed across the country and
produce a diverse range of products and services to meet the needs of the local markets,
the global market
and the national and international value chains.
The major advantage of the sector is its employment
potential at low capital cost.
It is well known that the MSME sector constitutes the spine of the nation, small
Industry has been one of
the major pillars of India’s economic development strategy since Independence.
India accorded high priority to Small and Medium Enterprises (SMEs) from the very beginning and pursued
support policies to make these enterprises viable, vibrant and over time,
these have become major
contributors to the GDP. Moreover, the MSME sector has weathered and overcome stiff competition in the
post liberalization period in the domestic and International arena. In nutshell, the micro, Small and Medium
enterprises (MSMEs
)
play a leading role in propelling economic growth sustaining livelihood and in
promoting equitable regional development